CWC tumbles on tough Caribbean

I'm the editor of our Life&Style section and editor of City A.M. The Magazine. I write about restaurants, theatre and the arts. I was once young journalist of the year, but then I got old.

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Steve Dinneen

CABLE & Wireless Communications (CWC) yesterday saw its shares tumble over 11 per cent after it admitted conditions in its core Caribbean market were tougher than expected.

The company’s shares closed at 42.41p – their lowest level since its demerger from the former Cable & Wireless Group in 2009.

Full-year revenue at the firm rose four per cent to $2.4bn (£1.4bn), but its Caribbean business kept core earnings broadly flat at $872m, hit by a decrease in tourist spending in the region.

Analysts expected CWC to report revenue of $2.3bn, and core earnings of $864m, according to consensus estimates.

Thr firm said the conditions in the Caribbean have been partially offset by a strong showing in Panama, Monaco and, especially, Macau.

Chief executive Tony Rice told City A.M. there is a need for caution, saying he expects “no favours from the economy” in the Caribbean, which he described as “a more volatile market than most”.

He said: “It’ll be a couple of years before it emerges. We aren’t sitting on our hands though, we have made big improvements to our business but it’s hard to prosper when people’s household incomes are falling.

“On the other hand, Macau is booming.” Macau has seen a rapid upshot in higher data revenue, which Rice described as “the future of the business”.

CWC’s stock had fallen nine per cent in the period since the demerger, against a more than 40 per cent drop for C&W Worldwide, which focuses on corporate and government markets in the UK and elsewhere.

It is paying a full-year dividend of 4.9p, which it said it expected to keep at the same level in the current year.